Even though Phoenix continues to outpace the nation for construction cost increases, project starts picked up at the end of the first quarter, according to Mortenson's latest Construction Cost Index report.
Nonresidential construction starts rose 19% in March, coinciding with the Valley seeing a 1.5% cost increase between Q4 2022 and Q1 2023, compared to a 0.6% increase nationally. Over the past 12 months, construction costs increased by 7.5% in Phoenix compared to 5% nationally, according to Mortenson's report.
Mortenson calculates its construction cost index by pricing nonresidential construction projects in the Phoenix region. Its index is used to measure changes in production factor costs, including materials and labor, over time.
